1. These comments are drawn up by a Sub-Committee of the General Council of the Bar of South Africa, comprised of Dan Neser S.C., Vincent Maleka S.C., John Mullins S.C. and Lindi Nkosi-Thomas.

2. In this document, the GCB comments on the individual components of the Draft Amendment Bill, without amplifying in any detail on the advisability or otherwise of proceeding in the general direction that the Draft Amendment Bill does. If permitted to do so, the GCB would welcome the opportunity to submit separate comments thereon, but suffice to say at this point that:

(a) The thrust of the Draft Amendment Bill is to considerably reduce benefits payable to accident victims, leaving it to them to recover the balance of their damage from the wrongdoer, and leaving it to the wrongdoer to insure himself or herself against that liability;

(b) It follows that prudent motorists will be obliged to take out insurance cover against this liability, which will be expensive and which will, in all probability in numerous cases, lead to duplication of litigation and the costs that go therewith;

(c)In the view of the GCB, going this route is inadvisable and counter-productive. The losses and the expenses will remain, but they will merely be shifted either in the event of impecunious and uninsured motorists to the innocent victims or, in other instances, to the general public and the insurance industry;

(d)There are alternatives:

(i) A notional alternative, which was (with respect, correctly) rejected by the majority of the so-called Satchwell Commission, is to statutorily do away with the victim's common law right to claim his or her uncompensated damages from the wrongdoer. We are satisfied not only that this would be wholly wrong, but also that any attempt to do away with the common law right would be unconstitutional.

Thus, this is not an option;

(ii) The option which the GCB believes is the advisable one involves a combination of approaches: in the first place, we believe that the present system is, in principle, an excellent one which should not be abandoned. We believe that the general public would be prepared to pay an increased premium on their petrol and diesel to retain a comprehensive system of coverage. We also believe that the existing system can be dramatically improved, both in terms of a streamlined approach to claims and litigation (resulting in significant savings), and in terms of a far better-run Road Accident Fund (also resulting in significant savings);

(iii) Finally, it is inarguably so that the root of the problem is the unacceptably high toll on our roads. That has to be meaningfully addressed and, in our view, it can be.

3.There have been a number of commissions of enquiry into road accident compensation legislation. One of those commissions was the Grosskopf Commission (relating to the then-applicable legislation, Act 56 of 1972).

The report of the Grosskopf Commission contained a minority report by one Mr J Keyser (whose recommendation that premiums be collected by way of a levy on petrol and diesel sales appears ultimately to have been accepted). Of interest, is that in his minority report Mr Keyser referred to the evidence of (and we quote)

two prominent economists namely, Professor G de Wet and Professor JA Lombaard, [who] both expressed the opinion that a system in which there is competition between a number of entrepreneurs and a profit motive usually renders a cheaper and more effective service than where there is a state monopoly. Professor de Wet expressed the opinion ... that if the MVA Fund's suggestion [that administration be centralised in the hands of the Fund] were carried out it would result in administrative chaos.

One might with respect pose the question as to whether Professor de Wet's prophecy has not proved true, albeit that the proof came somewhat later. We suggest that "administrative chaos" prevails at the Fund at the moment and has done so for more than a decade, worsening year by year. Is it right that motorists and pedestrians must pay the price for this? The Business Report of the newspapers published by Independent Newspapers of 3 February 2005 contained, on p.16, a report to the effect that the Legal Resources Centre had filed a suit against the Compensation Commissioner (who administers the fund created in terms of the Compensation for Occupational Injuries and Diseases Act, 130 of 1993) on behalf of 250 000 people. Paula Howell of the LRC is quoted as saying that the suit relates to

"the delay in processing ... claims registered with the fund dating back to 1992".

4.This is not - and is not intended to be - a diatribe against all compensation funds administered by government. What we suggest is simply that, as one might unfortunately predict and as Professor de Wet predicted in 1985, compensation funds that are administered solely by government will tend to become mired in bureaucracy and in delay, to the detriment of all concerned. We believe very firmly that:

(a)The primary causes of the symptoms which the Amendment Bill attempts to address are, probably in descending order:

(i) The unacceptably high accident rate on our roads;

(ii) Administrative chaos at the Road Accident Fund; and

(iii) A system that encourages waste and duplication as opposed to thrift and commonality;

(b) The Amendment Bill would not tackle any of these causes, would simply create its own difficulties, and in effect expects the innocent victims of road accidents to pay for the root causes, without those causes being addressed at all;

(c) No real attempt whatsoever has yet been made to tackle causes (ii) and (iii) (we immediately add that in our view the government is to be lauded for its efforts to tackle cause (i). With concerted effort, we believe that the accident rate can be significantly reduced);

(d) Were all concerned parties to get together, solutions that are meaningful and that do not involve as it were throwing out the baby with the bath water, could be found.

5.The GCB would be happy to discuss ways of significantly improving the existing system so as to cut costs with any interested party.

1. What follows is a detailed section-by-section comment on the Road Accident Fund Amendment Bill. Same must be read as subject to our general comments in A above.

2.

The proposed limit to general damages:

2.1 The effect of the proposed proviso to Section 17 is to:

(a) Limit general damages to "serious injuries";

(b)Set up a mechanism for determining whether a particular injury is "serious"; and

(c)Limit general damages, where it is payable (i.e. in instances of "serious injury") to a maximum of R100 000,00.

2.2 The question of whether such a limitation is justified or not is a very broad one. Suffice to say this:

(a) The arguments in favour of a limitation as such are financial: the Fund's income is limited, its expenditure is presently not, the cloth has to be cut somewhere and it might as well be cut here. Those presenting the argument are bolstered by the fact that it is not proposed to prevent the innocent party from claiming the balance of his/her damages from the negligent driver;

(b)Those arguing against the limitation will say that savings are better made administratively (where it might well be suggested that the Fund has shown an inability to control its own expenditure, the results of which inability ought not to be visited upon innocent claimants).

It is not proposed in this memorandum to deal in more detail with the arguments for and against a limitation as such.

2.3 It seems logical that any instance of "serious injury" would justify general damages far in excess of R100 000,00, so that the debate will not be as to amount, but as to whether the particular instance is one of serious injury or not.

2.4 The mechanism for determining "serious injury" strikes us as one which will itself lead to litigation. When does an injury qualify as serious and when does it not? Some instances will be obvious, and in fact perhaps most will be, but many will not be. This fact - that in attempting to save at one point, one could create unanticipated expense at another point, must be borne in mind.

3. Costs:

3.1 Unless we are mistaken, the intention is to delete Section 17(2), which provides for an entitlement to party and party costs.

3.2 If we are not mistaken in this regard, the proposed amendment is objectionable in the extreme: there is no good reason why a claimant with a valid claim should be deprived of his/her costs. On the contrary, liability for party and party costs constitutes a very important factor in the dynamic between the parties. From the point of view of the claimant, the fact that he will be entitled to recover the majority of his costs justifies his proceeding with a claim, whilst the fact that he will not recover all of his costs tempers his enthusiasm and militates against over-exuberance. From the point of view of the Fund, the fact that it will be obliged to pay the majority of a claimant's costs constitutes a very important incentive in favour of speedy resolution. As it is, one of the main criticisms of the Fund relates to its failure to deal expeditiously with claims. How much less expeditiously would it deal with claims if it faces no real penalty in this regard?

3.3 Of course, once action is instituted, costs will be covered by the normal provisions of the relevant court. Thus, the sole effect of the proposed provision will be to encourage claimants to institute action. That is surely counter-productive.

4. The proposed amendment to Section 17(4)(a):

4.1 The proposal is to alter Undertakings in respect of future hospital, medical and related expenditure so that it is no longer the third party who is entitled to reimbursement: the proposal is that only the service-provider will be entitled to same, and then only in accordance with a prescribed tariff.

4.2 Surely this has not been thought through? Common sense dictates that:

(a) A service-provider might well not be prepared to involve itself in the administrative uncertainty of recovering direct from the Fund. Many might jump at the opportunity, but many might not;

(b)Moreover, a service-provider might particularly not be prepared to recover direct from the Fund where its right of recovery is limited to a prescribed tariff, as proposed;

(c)If the service-provider declines to offer the service because it is not prepared to lump itself with the responsibility of claiming from the Fund, then what is the claimant to do? His claim has been resolved on the basis of a Section 17(4)(a) Undertaking. But he has no power to recover from the Fund himself in terms of that Undertaking. He has to persuade the service-provider to recover. Why on earth should he be subjected to this limitation?

4.3 It is suggested that, as presently proposed, the amendment is objectionable. It would be acceptable if the last lines of Section 17(4)(a) were to read as follows:

to compensate either the third party in respect of the said costs after the costs have been incurred and on proof thereof, or the provider of such service or treatment directly....

4.4 The question of whether recoverable costs should be limited to a prescribed tariff is dealt with below.

5. Limitation to prescribed tariffs:

5.1 The proposal is to limit both future medical costs (Section 17(4)(a)) and future loss of income or support (Section 17(4)(b)) to prescribed tariffs.

5.2 In the case of medical costs, the proposal is that the prescribed tariff be decided in consultation with medical service-providers, and that it be reasonable taking into account factors such as the cost of the treatment and the ability of the Fund to provide the compensation.

On the face of it, the proposal takes some care to ensure reasonableness. Whether the result will be reasonable, needs to be debated.

5.3 The proposed limit to loss of income or support is one of a maximum of R160 000,00 per annum.

Whether this is fair at all, should be the subject of debate.

6. Further limitations to future loss of income and support:

6.1 Further limitations are proposed. It is submitted that they are unnecessary, and unwieldy.

6.2 It is proposed that "compensation paid in respect of loss of support shall be divided equally amongst dependants". That is, in most instances, grossly unfair to spouses. The present rule-of-thumb is to accept that a housewife (and, in those instances, a house-husband) is entitled to two parts, compared to the one part of a child. This seems to apprehend reality, and it would be quite unfair to limit that wife's share to one part.

6.3 It is suggested that the support of a spouse should cease upon remarriage. It was accepted in Ongevallekommissaris v Santam [1998] 4 ALL SA 503 (A) that this might work very unfairly. To put it simply, the widow of a medical specialist who remarries a gardener should not lose her claim just because of that fact. The alternative would be to discourage remarriage.

Admittedly, if the total loss of support figure is to be limited to R160 000,00 per annum (see 5.3 above), this tends to diminish the argument. To revert to the example, the widow of the specialist who is in any event only receiving her share of R160 000,00 will probably replace that support even if she marries a gardener. Perhaps this also serves to illustrate the potential unfairness of the limitation referred to in 5.3 above.

7. Emergency medical treatment:

7.1 The proposed new Section 17(7) is a very good idea.

7.2 The caveat should be sounded, though, that there is much potential for abuse. However, better to have a system where hospitals and clinics are encouraged to afford all serious accident victims with emergency medical treatment, with the Fund doing its best to combat the inevitable abuse, than a system where much-needed emergency medical treatment is delayed whilst the hospital or clinic establishes the merits of the matter.

8. Limit to funeral expenditure:

The proposal is to limit such claims to R5 000,00. At present, such claims are in any event fairly severely limited, and on a robust basis it might be that this further limitation will save expense whilst not materially limiting awards, and is therefore acceptable.

The point to be made is that funeral expenditure claims are never, in any event, substantial. Thus, limiting these claims does not make serious inroads.

9. Proposed amendment to Section 21:

The proposed amendment to Section 21 makes clear that, to the extent that claims against the Fund are now severely limited, the innocent party retains the right to sue the wrongdoer for the balance.

This exchanging of a statutory claim for a common law claim underpins the proposed changes. On the one hand, it is suggested that the changes themselves would not pass constitutional muster without this. On the other hand, it is suggested that this should give one pause to consider whether there are not better alternatives than limiting claims. It has, it is suggested, been shown that, for all its faults, ours is an extraordinarily inexpensive and fair system. There is much room for improvement, and it is suggested that perhaps the real debate, about the real options that there are for improving the present system rather than virtually doing away with it, has yet to be entered into.

10. Section 11 of the Amendment Bill:

It is gratifying to note that the Fund accepts that the amendment should not apply to accrued claims. This is the correct approach to adopt.

With respect, one gets the impression that the Amendment Bill was not fully thought through. It is as if someone has gone through the Act with a pen, looking to delete that which costs money, without necessarily thinking-through the implications of each deletion.

DATED on this the 7th day of FEBRUARY 2005.

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D A NESER S.C. IV MALEKA S.C.

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J F MULLINS S.C.LG NKOSI-THOMAS